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Strategies & Market Trends : Africa and its Issues- Why Have We Ignored Africa?

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From: S. maltophilia12/20/2022 1:23:22 PM
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So, unfortunately, it’s time for another one of these. By which I mean both a “ [Country], you were doing so well!” post, and a “ Why [country] is having an economic crisis” post. I thought Ghana was going to be one of my development success stories, and then before I got around to writing about, its economy went into a crisis. The basic story here is that Ghana just defaulted on most of its external debt, and is experiencing very high inflation, and is going to have to be bailed out by the IMF. That’s going to result in financial and economic chaos in the country, a year or two of depressed economic activity, and hardship for the Ghanaian people.

I’m sure Ghana will eventually bounce back. And as I’ll explain, when we look at the particulars of how this crisis has played out, we see that the government is being smarter than many. But overall this is pretty disappointing. So first I’ll talk a bit about why it’s so disappointing, and then move on to the crisis itself.

Why Ghanaian development is important

Obviously Ghana’s development is most important to the ~32 million people who actually live in Ghana. But it’s also important in the broader context of African development, because it’s one of the leading candidates to become the “first mover” in the region.

Africa is really, really poor. Not just compared to rich countries like the U.S., but compared to other developing regions. In 1990, fewer than 1 out of every 7 people living on less than $2.15 a day (the poorest of the poor) lived in Sub-Saharan Africa; by 2019, it was 3 out of 5.....
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